How do I setup a Recurring Investment on a Minor account?

It is critical in the setup of a Recurring Investment on a minor account to define what a Recurring Investment is, and explain what it is you are trying to do.

WHAT IS A RECURRING INVESTMENT?

A Recurring Investment is a process in which a client who operates a minor account, decides he / she wants to invest an amount of money into a particular instrument (share / ETF etc.) on a regular basis.

For example: I decide that I can save R1,000 per month to go towards an investment for my daugher in her minor account on EasyEquities, and with that R1,000, I wish to purchase R650 worth of db x-trackers MSCI World Index ETF and R350 worth of Satrix40 ETF.

It's a mission to go onto the platform every month, EFT the funds to my account, wait for them to arrive in my available funds, and then when they do go and make 2 separate purchases of those chosen ETF's.

Instead, I can set up a Recurring Investment to do that for me every month (or quarter or year), and then forget about it comfortable in the knowledge that every month my money will go to EasyEquities AND will be invested in those ETF's at the times I've set up.

TWO-STEP PROCESS

So it's very important to understand that a recurring investment is a two-step process involving:

Moving money / funds from your bank account, into the EasyEquities account of the minor in question. Without the funds, you cannot make the investment. Simple.

Then telling the platform what to purchase with the funds that have been transferred.

The key difference in approach is that on a Minor account, the Recurring Investment must always be setup to operate out of the Free Cash (available funds) of the account, rather than via debit order.

So if Recurring Investments are always to be setup using Free Cash (available funds), then the Authorised User of the account needs to ensure that those funds are transferred into Free cash and available for use on the date the Recurring Investment runs or it will fail and the desired purchase will not be made.

Once they've set up the movement of funds correctly, all they now need to do is tell the platform what to buy. They can do this by following one of the 3 methods below.

A. From the Recurring investments page

The setup of a Recurring Investment can be initiated from the Recurring Investments page as per the steps below.

1. Click on the My Recurring Investments option in the stack menu to the left of the EasyEquities logo - per the image below.

Doing so will take you to the Recurring Investments page of the website.

2. Click on the Setup Recurring Investment button under the specific type of recurring Investment you'd like to make.

There are 3 types as follows:

1. Shares / ETF's - clicking on the setup button under this type this will take Investors to the Browse companies page from on which they can search for and select shares / ETF's to buy in the usual manner. After selecting a share or ETF they should arrive at the Buy page of that share or instrument and can then continue to method B below.

2. Bundles - clicking on the setup button under this type will take Investors to the Baskets page of the site. After selecting the basket they like clicking on the buy button for that basket, they should arrive at the basket Buy page and can then continue to method B below.

3. Available Funds - although it may be visible within a minor account, this option can NOT be used, as it requires setting up a debit order which cannot be done on platform for a minor account, but has to be done by submission of a form as outlined in this How to move funds into a Minor account for a Recurring Investment?FAQ article.

When you navigate to the buy page of a share, ETF, basket or bundle, you will be greeted with the familiar buy options of selecting one of the standard amounts (Ie. R250, R500, R1000) to Invest together with the custom amount field - as shown in the image below.

To setup a Recurring Investment from here, please follow the steps below:

1. Select / enter the amount you'd like to Invest

2. Click on the Monthly button if you'd like to setup a Recurring Investment

3. Doing so, will take you to the add recurring investment screen with the recurring investment amount populated with the amount you selected / input on the previous page as well as a 10% default value for the annual increase percentage. Both of these figures can be changed on this page.

5. Choose whether you want the charges option for the specific Recurring investment to exclude / be inclusive of transaction fees. For each recurring investment setup, you can choose the option that suits you at the time. This will override your site wide excluded vs inclusive settings.

6. Choose a payment method for your Recurring Investment.

For a recurring investment on a Minor account, the "User Account Free Cash" option must ALWAYS be chosen.

Choosing this option will mean it is your responsibility to have free cash available in your account on the selected date of the Recurring Investment.

If the funds are not there at the time we try to Invest them for you, the Recurring Investment will not be made.

7. Choose when you want the payments to occur. You have the choice of making the recurring investment every:

Month

Quarter

Year

8. Choose the day on which you'd like the recurring investment to be made. You can choose the:

1st of the month

15th of the month

28th of the month

9. If you choose the quarterly or annually options, you will be required to select the month on which you want the quarter or year to start.

10. Having chosen Free cash as the method to fund your recurring investment (see step 6 above), you need only accept the terms and conditions by clicking on the little box presented to you on the bottom left of the page.

11. Once you have completed all your selections, click on the continue button - this will take you to the confirm your recurring investment page, which will summarise the full details of your recurring investment in 2 parts:

Recurring Investment details - this part of the confirmation outlines the following details for you to check.

The instrument / product you are buying

The chosen payment method

The frequency of the payment

The annual % increase chosen (default value of 10% if not changed)

The exclude fee or fee inclusive option chosen

The date on which the first Investment will be made

Investment cost - this part of the confirmation outlines the costs of the Investment for you to check

Broker commission - usual brokerage cost of 0.25%

Settlement and administration - the usual cost of 0.075%

Investor protection levy (IPL) - the usual cost of 0.0002%

VAT - levied against the 3 fees above

Securities transfer tax and administration - the usual cost of 0.25% (this is not charged against investments made in a TFSA account)

Recurring Investment fee - a new fee particular to the setup of the Recurring Investment

13. Once you have checked all of the details of your recurring investments and are happy they are correct, click on the ADD TO RECURRING button at the bottom right of the confirmation screen.

Doing so will take you to the recurring investments page on which you will see a confirmation that the recurring investment was successfully created - see image below

C. From the Cog icon on the corner of an instrument ( share / ETF ) you own

All the instruments an Investor owns can be found on the Account Overview screen of their Investment and TFSA accounts.

Each share / ETF on the page has a small red gear icon in the top right-hand corner of the rectangular block as highlighted in the image below.

Clicking on this cog icon will give the Investor a number of options in relation to that particular share / ETF

Should an Investor like a particular share / ETF and want to create a Recurring Investment for it, they can do so as follows:

1. Click on the red gear icon

2. Click on the Add Recurring option displayed in the image above

Doing so will take the Investor to the add recurring investment screen

3. The Investor can now choose the particular details of the Recurring Investment they would like to setup starting with entering the amount they would like to invest in the chosen instrument and if desired, changing the annual increase percentage (from the default value of 10%).

The investor can then continue with the steps explained in detail from Step 4 onward of Method B in this FAQ article (see above).